Description: Canada’s Minister of Trade, Dominic LeBlanc, stated that his team was continuing negotiations with their American counterparts to ease trade tensions between the two countries which began in Aug this year. Trump imposed tariffs on Canadian goods back in Aug including 50% tariff on Canadian steel and 25% tariff on the automotive sector. Canadian Prime Minister, Mark Carney, stated that this recent rapprochement was due to the fact that the US were leaning closer to Canada’s position on bilateral trade. Trump late last week signed an executive order removing 50% tariffs on certain Canadian agricultural and forestry products.
Impact: Trump is highly likely to further deescalate trade tensions with Canada ahead of the midterms in order to assuage voters impacted by the Canadian tariffs. Canada is likely in a favorable position in the negotiations but it’s unlikely to exploit that position risking a potential retraction of progress achieved by the recent negotiations. Exploiting the unfavorable position of the US, Canada is likely to secure a favorable long – term trade deal which would solidify the industrial relations between the neighbors.